Digital Currency Group (DCG), the parent company of the bankrupt trading firm Genesis Global Holdco, reached an agreement with Genesis creditors to settle claims.
DCG plans to enter into a debt settlement agreement and assume new obligations. They include a loan of $328.8 million with a two-year maturity and a loan of $830 million over seven years.
According to court filings, the company also intends to pay $275 million in four installments.
If the plan is successfully implemented, unsecured creditors would recover between 70% and 90% of their invested funds in U.S. dollar equivalents and between 65% and 90% depending on the type of digital asset.
On 16 November 2022 Genesis froze withdrawals and the issuance of new loans. The firm cited “heightened demand” from clients after the collapse of FTX and the Three Arrows Capital hedge fund.
In January 2023 the firm and its subsidiaries Genesis Asia Pacific and Genesis Global Capital filed for bankruptcy. According to media reports, their liabilities exceeded $3 billion. This amount includes claims by Gemini’s clients for $900 million.
In May DCG missed a payment of $630 million as part of compensation to Gemini Earn users.
In July, the Winklevoss twins’ exchange filed a lawsuit against Digital Currency Group and Barry Silbert, calling the latter the “architect and mastermind of the fraud.” Later at DCG was asked to have the suit dismissed.